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Summer Internship Report For Bank Alfalah: Submitted By: Your Name
Summer Internship Report For Bank Alfalah: Submitted By: Your Name
For
Bank Alfalah
Submitted By:
Your Name
Submitted To:
Internship Coordinator
Submitted On:
Table of Contents
1
EXECUTIVE SUMMARY
INTRODUCTION
2.1
2.2
3
3.1
3.2
3.2.1
3.2.2
3.2.3
3.3
3.3.1
3.3.2
3.3.3
3.3.4
3.3.5
3.4
3.4.1
3.4.2
3.4.3
4
OPERATIONAL ANALYSIS
FINANCIAL ANALYSIS
OPERATIONAL RESULT
BALANCE SHEET RESULTS
RATIO ANALYSIS
HUMAN RESOURCE ASSESSMENT
BATCH TRAINEES
DIRECT INDUCTION OF FRESH CANDIDATES
EXPERIENCED PROFESSIONALS
TRAINING
BENEFITS PROVIDED BY BANK ALFALAH
MARKETING ANALYSIS
ELECTRONIC
PRINT
SPONSORSHIPS
ENVIRONMENTAL ANALYSIS
7
8
10
10
12
12
13
14
15
16
16
17
17
18
19
19
19
20
21
21
21
23
25
25
26
28
30
30
31
32
32
32
34
34
5.1.4
5.2
5.2.1
5.2.2
5.2.3
5.3
5.3.1
5.4
5.4.1
5.5
5.5.1
5.5.2
5.5.3
5.6
5.6.1
5.6.2
5.6.3
5.6.4
6
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
35
36
36
37
37
38
38
40
41
42
42
43
45
46
46
48
49
51
52
52
52
52
52
53
53
53
53
CONCLUSION
54
RECOMMENDATIONS
55
8.1
8.2
8.3
8.4
8.5
8.6
8.7
9
9.1
9.2
9.3
9.4
TECHNOLOGICAL ADVANCEMENTS
WORKSHOPS AND COUNSELING
INCENTIVES
PRIORITY BANKING AND BUSINESS DEVELOPMENT DEPARTMENT
INNOVATIVE PRODUCTS
PLACEMENTS OF EMPLOYEES
AMENITIES IN BRANCH
APPENDIX
WEB RESOURCES
REPORTS
BALANCE SHEET EXTRACT FOR BANK ALFALAH 2006
PROFIT AND LOSS EXTRACT FOR BANK ALFALAH 2006
55
55
55
56
56
56
56
57
57
57
58
59
Table of Illustrations
FIGURE 1: CELEBRATING 10 YEARS OF BANK ALFALAH ..................................................................................9
TABLE 1: CITIES WHERE BANK ALFALAH HAS ITS BRANCHES.......................................................................10
TABLE 2: PROFIT COMPARISON FOR 2005 & 2006.........................................................................................12
FIGURE 2: PROFIT FIGURES FOR THE PAST FIVE YEARS (IN MILLION).............................................................12
FIGURE 3: ADVANCES AND DEPOSITS FOR THE YEAR 2000-2006...................................................................13
FIGURE 4: STOCK PRICE FOR THE PERIOD DEC 04-DEC 06.............................................................................14
TABLE 3: EPS FOR THE PERIOD 2000-2006....................................................................................................14
FIGURE 5: TOTAL NUMBER OF EMPLOYEES FOR THE PERIOD 2000-2006......................................................15
FIGURE 6: PROCEDURE FOR ACCEPTING BATCH TRAINEES............................................................................16
FIGURE 7: PROCESS FOR EMPLOYING FRESH CANDIDATES............................................................................17
FIGURE 8: PROCEDURE FOR EMPLOYING EXPERIENCED PROFESSIONALS......................................................17
FIGURE 9: A PRINT ADVERTISEMENT OF BANK ALFALAH..............................................................................20
FIGURE 10: UNVEILING LOGO FOR A CRICKET SERIES...................................................................................20
TABLE 4: SERIES SPONSORED BY BANK ALFALAH........................................................................................20
TABLE 5: TYPES OF CREDIT CARDS AND THEIR MARKET SEGMENTS..............................................................22
FIGURE 11: SEGMENTATION OF TOTAL ASSETS...............................................................................................23
FIGURE 12: SEGMENTATION OF TOTAL LIABILITIES........................................................................................24
TABLE 6: LISTS OF LOCAL PRIVATE BANKS...................................................................................................25
TABLE 7: LIST OF FOREIGN BANKS................................................................................................................25
TABLE 8: MARKET SHARES IN TERMS OF DEPOSITS.......................................................................................26
TABLE 9: MARKET SHARES IN TERMS OF PROFIT AFTER TAXES....................................................................27
TABLE 10: PROFITS PAID ON ROYAL PROFIT ACCOUNT..................................................................................33
TABLE 11: INTERNAL CODES FOR SOME ACCOUNTS......................................................................................34
TABLE 12: MARK UP RATES FOR CAR FINANCING.........................................................................................38
1 Executive Summary
Pakistan after getting its independence, did not inherit a strong banking industry and
since then saw a number of events in the industry, like the nationalization of banks in the
1970s. However today, the banking industry of Pakistan has been growing over the past
few years, mainly because of the consistent policies implemented by the Government of
Pakistan, including the privatization of banks in Pakistan. Also the State Bank of
Pakistans, monetary policy has been very friendly toward the banking industry.
There are a number of different banks established in Pakistan, including local
incorporated commercial banks, foreign incorporated commercial banks, development
financial institutions, investment banks, discount & guarantee houses, housing finance
companies, venture capital companies, micro finance banks and Islamic banks.
Bank Alfalah was incorporated in 1997 and was later privatized by the Government of
Pakistan. The Abu Dhabi Group bought the majority shares of the bank and so got the
rights to control the banks operations. Since the privatization of the bank, Bank Alfalah
has implement different policies to make it one of the best banks of Pakistan, which
included introducing new products and services and increase its operations by opening
new branches in Pakistan.
Today Bank Alfalah is operating in more than 70 cities of Pakistan and operating its
foreign branches in Bangladesh, Afghanistan and Bahrain. The total employees of Bank
Alfalah in 2006 were 6,543, which was an increase of 25% from the past year. The
increase in the number of employees joining Bank Alfalah shows that people feel
confident in Bank Alfalah as a prospect employer.
The financial statistics of Bank Alfalah are also as impressive as their human resource.
The profit after taxation for Bank Alfalah in 2006 amounted to Rs 1,762,691 (000) and
its total assets for 2006 amounted to Rs.275,685,541 (000). The stock prices and earning
per share of the bank have also increased over the years. Bank Alfalah promotes its
products and services through print and electronic media. Bank Alfalah also promotes
itself by sponsoring different events.
For Bank Alfalah, it has to compete in an industry that has grown in 2006 by almost 17%
in overall assets and profits growth was 33% from the previous year in 2006. The major
5
competitors of Bank Alfalah, pose close competition and are mainly large nationally
incorporated banks and a few international banks, that all want to become the leading
banks of Pakistan, by creating some edge in the industry. To create this edge, technology
has played an important role in the industry as banks are continuously trying to improve
its products and services by introducing innovative products.
I did my six weeks internship at Bank Alfalah I-8 Markaz Branch and worked in account
opening department, operations department, accounts department, home loans
department, car finance department and credits department.
Some of the work that I did in these departments included collecting cheques, filling
account opening forms, activity checking and making a borrowers basic fact sheet.
Although there were no such big problems found in the working of Bank Alfalah, there
were some problems in training of the employees, incentive schemes and product
innovation.
Some of the recommendations include workshops for employees, job rotation, teams
work to find innovative products and scholarship programs for employees.
Lastly Bank Alfalah has seen a rapid growth in its activities by introducing a range of
products and services and showing its presence in the country by opening new branches
and in future should keep this momentum and always strive to become the best.
2 Introduction
2.1 Central Background Information
Banking is one of the most sensitive businesses all over the world. Banks play an
important role in the economy and are considered as the backbone of an economy in
every country and Pakistan is no exemption. Banks are custodian to the assets of the
general masses. The banking sector plays a significant role in a contemporary world of
money and economy. It influences and facilitates many different but integrated economic
activities like resources mobilization, poverty elimination, production and distribution of
public finance.
Pakistan has a well-developed banking system, which consists of a wide variety of
institutions ranging from a central bank to commercial banks and to specialized agencies
to cater for special requirements of specific sectors. The country started without any
worthwhile banking network in 1947 but witnessed phenomenal growth in decades to
come.
By 1970, it had acquired a flourishing banking sector. Nationalization of banks in the
seventies was a major upset to domestic banking industry of the country, which changed
the whole complexion of the banking industry. With irrational decision at the top all the
commercial banks were made subservient to the political leadership and the bureaucracy.
The commercial banks thus lost their assets management equilibrium, initiative and
growth momentum. They ceased to be a business concern and became big bureaucracies.
The era of nineties was the climax of privatization, deregulation and restructuring in the
domestic banking industry and financial institutions. The Muslim Commercial Bank was
the first bank to privatize. Followed by Allied Bank limited, United Bank Limited and
Habib Bank Limited have all been privatized.
Today, the banking sector is providing financial solutions to the masses and is growing
and becoming a solid partner in the development of the Pakistani economy, this growth
potential has seen different acquisitions in the banking sector, with the Standard
Chartered and Union Bank being the most prominent. Standard Chartered acquired an
80.86% interest in Union Bank Limited for a cash consideration of US$413 million 1.
1
Other acquisitions include ABN AMRO acquiring 93.4% interest in Prime Bank for Rs.
13.8 billion2 and Temasek Investment Holding of Singapore taking up a stake in PICIC
Commercial Bank. Temasek also has its stake in NIB Bank.
Vision
To be the premier organization operating locally & internationality that
provides the complete range of financial services to all segments under one
roof.
Mission
To develop & deliver the most innovative products, manage customer
experience, deliver quality services that contributes to brand strength,
establishes a competitive advantage and enhances profitability, thus
providing value to the stakeholders of the bank.
Board of Directors:
2
Now 10 years after being incorporated, Bank Alfalah has emerged as one of the foremost
financial institution in the region, endeavoring to meet the needs of tomorrow today,
operating through 198 branches in 74 cities nation wide, with total employees exceeding
6000. Bank Alfalah also expanded its network internationally by opening branches in
Afghanistan, Bangladesh and Bahrain to further improve its image as a premier banking
institution.
Figure 1: Celebrating 10 Years of Bank Alfalah
3 Companys Analysis
3.1 Operational Analysis
Bank Alfalah is operating with an extensive network of 198 branches nationwide that are
spread allover the four provinces, Different varieties of services that each branch is
equipped to provide include:
Branch/Retail Banking:
Example: Deposits, Remittances, Lockers
Consumer Banking:
Example: Credit Cards, Auto Loans, Home Loans
Electronic Banking:
Example: Phone Banking, ATM's, Online Banking
Corporate Banking:
Example: Short/Long Term Finance, Trade Finance, Structured Finance
Treasury Finance:
Example: Money Market, FOREX Market, Investments, Govt. Securities
Some of the major cities of Pakistan and the number of branches located in these cities
are as follows
Table 1: Cities where Bank Alfalah has its branches
City
Islamabad
Karachi
Lahore
Peshawar
Quetta
Rawalpindi
Number of Branches
8
35
30
4
4
8
10
each controlled and monitored by their respective area office. There are 9 area offices in
the northern area.
Each branch of Bank Alfalah comes under an area office, for example, the area office of
Bank Alfalah I-8 Markaz is located in Rawalpindi. The area offices are responsible for
authorizing its branches on providing different services to its customers. Each branch has
to first get an approval from the area office before providing any service to its customers.
For example, a car financing application needs to be approved by the area office before
any legal documents or order for a car is placed by the bank.
Furthermore Bank Alfalah is also operating 7 foreign branches in three countries, namely
Bangladesh, Afghanistan and Bahrain.
Another major part of operations for Bank Alfalah includes remittances that come from
abroad and are thus considered as home remittances. Some of banks with which Bank
Alfalah has agency agreements are as follows:
Bank Alfalah has also established relationships with other internationally renowned banks
are part of Bank Alfalah list of correspondence banks. The total numbers of banks that are
included in this list of correspondence are 170, in all major countries of the world and
help Bank Alfalah in providing services to its customers.
Furthermore Bank Alfalah is also a member of MoneyGram, a service that facilitates
speedy transfer of remittances on a person-to-person basis and SWIFT (Society for
Worldwide Integrated Financial Transfers), a service that facilitates banks to transfer
important messages or financial transfers securely and speedily to other banks. Both
these services are recognized globally, with members from all over the world.
Bank Alfalah being a member of both these services reiterates its commitment of
providing its customers with the state of the art services.
11
Description
2005
2,965,588
(402,298)
2,563,290
(861,196)
1,702,094
Rs. 3.92
2006
Rupees in000
3,263,635
(697,960)
2,565,945
(803,245)
1,762,691
Rs 3.86
Profit after taxation for the year 2006 is Rs 1,762,691, which is just an increase of 3.5%,
however earning per share, a ratio that is closely looked over by the shareholders of a
company decreased from Rs. 3.92 to Rs. 3.86. The major reason for this decrease in this
ratio is mainly the small increase in profits before taxation, increase in provisions and
finally, the increase in share capital of Rs. 2 million from the past year.
Figure 2: Profit figures for the past five years (in million)
2500
2000
As
1500
Profits after taxation
1000
shown in
Figure 2,
500
profits
0
2000 2001 2002
2003
2004
2005 2006
for Bank
Alfalah have been growing from 2000 to 2003, after which they declined, however they
have again shown an upward trend for the past two years, which is favorable.
12
The above figure again shows that fact that both advances and deposits have been
increasing at a steady rate over the past six years, which not only shows excellent policies
of the top management but also the immense confidence of the customers that not only
deposit money but also take advances from the bank itself.
The immense confidence of the customers and its shareholders has also seen a rise in the
stock price of the companys share at the Karachi Stock Exchange. The stock price had
rise for some period, after which it fell, but again it rose, which again shows the
confidence of investors in the company, as seen below:
Figure 4: Stock price for the period Dec 04-Dec 06
13
Earning per share is an important ratio that is useful for the shareholders of the company,
as it measures the amount of earnings available for outstanding common stockholders.
EPS, although had been raising and falling for some periods but it has now remained at a
constant rate, as seen in the table below:
Table 3: EPS for the period 2000-2006
Year
2000
2001
2002
2003
2004
2005
2006
8.49
3.9
3.92
3.86
14
Return on Total Equity: This ratio like the ROA previously calculated is a debt
management ratio and is calculated by dividing the net income available for common
stockholders by the common stockholders equity. This ratio was 20.37% in 2006, which
decreased from 30.65% in 2005. The decrease in this ratio is mainly due to two reasons:
firstly there was a small increase in the earnings available for common stockholders and
secondly there was an increase in common stockholders equity in 2006.
The above figures show that all prospect employees feel confidence in Bank Alfalah as
their prospective employer.
Bank Alfalah, as a response to this confidence has three ways of employing prospect
employees for their organization.
15
16
3.3.4 Training
Bank Alfalahs management believes in developing the potential of the Banks employees
to the fullest extent. Training & Development Centre of the Bank are housed in state of
the art facilities at Karachi and Lahore of provide training to its employees. It is
17
obligatory for each staff member of the bank to attend at least two days of training in a
calendar year, with training programs in the following areas:
Credit Administration/Documentation
Furthermore training programs have also been introduced for fresh entrants into the bank,
to help them in learning and performing their new tasks.
Gratuity Fund
Medical Insurance
Bonuses
Life Insurance
Promotions
18
Electronic
Sponsorships
3.4.1 Electronic
The major way in which todays organizations promote its products and services is
through television, not only because its economical but also because the visual and audio
aids help in promoting its product.
Television ads for Bank Alfalah mainly try to emphasis the The Caring Bank, message
in its advertisements, by showing how its services can help you with the different
financial problems that you face in your every day life. For example, an advertisement
showed how Bank Alfalah Credit Cards helped a couple when they had no cash left
during a shopping trip or how a father happily shows his family a new car that he had
financed from Bank Alfalah .
Another major way in which Bank Alfalah advertises its products electronically is
through its website, which is designed in an effective manner with detailed information,
so that visitors can effectively know about the different services that the bank provides.
3.4.2 Print
Print advertisements are another major way in which Bank Alfalah advertises its product
to the masses. Print media advertisements are mainly printed in major English and Urdu
newspapers across Pakistan.
19
The messages of these advertisements are mainly of new financial services that the bank
may introduce over time. These advertisements are so effectively designed that All
Pakistan Newspaper Society (APNS), gave Synergy Advertising the Gold Award for Best
Visual Design (color) for their advertisement in 20043.
Figure 9: A Print Advertisement of Bank Alfalah
Figure 10: Unveiling Logo for a Cricket Series
Source: DailyTimes.com.pk
Source: Google.com
3.4.3 Sponsorships
Bank Alfalah has been sponsoring different sporting tournament, especially cricket which
is the most popular sports activity of Pakistanis and is watched by millions whenever
there is a tournament featuring the Pakistani cricket team and is thus a great way to
advertise their products. Some of the tournaments that Bank Alfalah has sponsored over
the year are as follows:
Table 4: Series Sponsored By Bank Alfalah
Series
Tri series b/w SL,NZ and PAK
Pakistan Vs England
Pakistan Vs West Indies
Year
2003
2005
2006
20
4 Environmental Analysis
4.1 Industry and Market Analysis
4.1.1 Major Product Lines Market Segments
Banking Sector has a wide variety of products that cater to the financial need of the
masses; some of the major products that a bank provides to its customers and is mostly
used by the banks customers are as follows:
Checking Accounts
Car Financing
Home Loans
Credit Cards
Current Account
21
turned into an Online Account and its customers also receive an ATM card. The major
segments of this account are sole proprietors, partnerships, companies (both private&
public) and any other individual that wants to open their account and not earn profit or
pay zakat on their balances.
Profit & Loss Account
Profit and loss accounts are one of the basic accounts that give interest to its customers
deposits. These accounts pay interest annually and zakat is also deducted on these
accounts. ATM card are also provided to these accountholders. The main segment
targeting these accountholders are people that want to save money which might include
household etc. This account does not target companies however.
Credit Card
Silver
Gold
5
Market Segment5
Salaried and self employed individuals starting
their careers
Salaried individuals or self employed
22
Platinum
23
Total advances for 2006 amounted to Rs. 2,390,503 (million) and make up 56% of the
total assets for all banks in 2006, the growth in advances was 20.17% from the past year.
The total liabilities for 2006 amounted to Rs. 3,879,514 (million), with a growth of
15.14% from the past year. The segmentation of total liabilities is as follows
Figure 12: Segmentation of Total Liabilities
Deposits and other accounts amount to Rs. 3,200,332, which is 83% of total liabilities
and saw a growth of 12.94% from the past year.
The profit for the year 2006, according to the Banking Statistics of Pakistan 2006 report
for all banks was Rs. 84,176(million), with a growth of 33%.
Also according to a report of the Daily Times 6, consumer finance grew by 29% to reach
Rs. 325 Billion in 2006. Furthermore share of consumer finance in overall loans
increased to 13.5 percent in CY06 from 9.4 percent in CY04 on the back of persistent
higher growth.
24
Source: Wikipedia.com
25
Source: Wikipedia.com
are as follows:
MCB Bank
Citibank
Askari Bank
As far as UBL is concerned, Bank Alfalah feels that it is a competitor because UBL itself
is a sister company of Bank Alfalah as the Abu Dhabi Group has stake in UBL and so
there is always a comparison between them.
Furthermore, Askari Bank is a competitor because of the fact that the product and
services that it offers is fairly similar to that of Bank Alfalah and its markup rates are
similar as well. MCB, after being privatized has also introduced a wide variety of
services and with its large number of account holders, it is also a big competitor.
Citibank is a foreign bank that has been established in Pakistan for a long period of time
and has introduced a number of first class services and as Bank Alfalah is also competing
in the services industry, it needs to benchmark its product and services to a bank with a
stature to that of Citibank.
Banks
Deposits(in
Overall
Domestic
Foreign Banks
26
Bank Alfalah
Askari Bank
MCB Bank
United Bank
Limited
Citi Bank
Total Market
Shares
thousands)
Market Shares
239509391
131839283
257461838
335077873
7%
4%
8%
10%
63103884
2%
31%
42%
42%
Banks
Profits
taxes
after Overall
Market Shares
Bank Alfalah
Askari Bank
MCB Bank
United Bank
Limited
Citi Bank
Total Market
Shares
1762691000
2249974000
12142398000
9468232000
2%
3%
14%
11%
Domestic
Foreign Banks
Banks Market Market
Shares7
Shares8
2%
3%
15%
12%
2575161000
3%
33%
32%
60%
60%
Total Profits
84176000000
Total Domestic 79888000000
Profits
7
8
Incorporated in Pakistan
Incorporated Outside Pakistan
27
Profits after taxes show how effectively a company is operating and more profits show
not only show that the company is successful in selling its products and services
profitably but also that it is able to control its expenses, which makes that companys
shareholders happy.
Bank Alfalah is lacking when it comes to its market share and that of its competitors in
terms of profits after taxes mainly because of the high cost deposits incurred by Bank
Alfalah.
28
These strategies have helped UBL to raise its image in the banking sector. Its long term
credit rating is AA+9.
29
30
31
Simple tasks such as balance inquiry and bank statements have become as easy as a click
of a button with highly sophisticated information systems.
All banks today have their own information systems that they can use in almost all
departments like clearing, account opening, car leasing and remittances.
4.3.2 Innovation
Innovation is a must in modern times, as it will help banks to compete in todays highly
technologically advanced industry. Some of the innovations that the banking industry is
looking forward are:
More advanced information systems in banks that are more secured than before to
eliminate any chances of fraud and which are even more user friendly to help
employees to use them not only to make critical decisions but also satisfy
customer need in a more timely manner.
Advancements in online transfer from inter branch to an even more helpful inter
bank transfers.
Automation of simple operations task that will not only improve efficiency but
also reduce costs like stationery and courier services, like automation of check
books etc.
All banks in Pakistan starting internet, mobile and telephone banking in its
operations.
32
Accounts Opening
Operations
Accounts
Home Finance
Credits
Car Financing
33
Amount
From Rs.50,000 to 999,999
From Rs.1,000,000 to 4,999,999
Rs.5,000,000 and above
Profit pa.
2.50%
3.50%
Negotiable
34
CNIC
Partnership Deed
Partners CNIC
Company Letterhead
Memorandum of Association
Article of Association
Directors CNIC
Company Letterhead
Account Type
Current Account
Profit& Loss Account
BBA Account
Royal Profits
Current Account USD
Code
010*****
020*****
0189****
029*****
018*****
35
36
37
Facility of home loans range from 0..5 million to 50 million (renovation facility
for 3.5 million)
Fixed rate for one year @ 11.5% Salaried and @ 13.5% Businessmen and
expatriate Pakistanis
38
Tracking devices with all Suzuki Mehran and all Toyota Models
Co borrowers facility
The mark up rates for all locally build new cars is a follows:
Table 12: Mark up Rates for Car Financing
Financing Product
1Yr
2Yr
3Yr
4Yr
5Yr
14.00%
14.50%
15.00%
15.50%
15.50%
39
documents as well. The final authority of passing the application remains with the Area
Office.
After the Area Office approves the application, the customer will make the down
payment, give the bank post dated cheques and sign a legal document with the bank.
When this process is complete, a quotation is sent to the car dealer for the specified car,
insurance documents are sent to the specified insurer. Later on the car is registered with
the Excise and Taxation Officer and is given a number.
When all this process is complete, the key to the car is handed over to the customer with
all documents relating to the car. When the tenure for the car financing is completed, the
bank issues a NOC to the customer.
As part of my internship I had to complete the final legal document signed by the
customer, by writing in detail about the car, the financing period and witnesses pertaining
to the agreement etc.
40
41
42
Packing
After the activity is checked, all sorted vouchers are counted, both debit and credit and
then packed by totaling the vouchers.
Current Finance
Karobar Finance
Milkiat Finance
karobar finance are same with one big difference, which is that in karobar finance, the
individual has to clear all his balance in his account, once in a year.
Tenure of 2-12 years except for renovation, which is for 2-4 years
Mark up of (KIBOR+4%)
Eligibility age should be less than 65, with 3 years of existing business
44
Usance
Sight
Usance
Usance LC is a form of LC, whereby the bank engages to honor the beneficiary usance
draft on an acceptance that the items are in accordance with the conditions. Payment is
made against acceptance.
Sight LC
Theses are letter of credit where the bank engages to honor the beneficiarys sight draft
upon presentation provided that the documents are in accordance with the conditions of
the L/C. This is a more safe form of letter of credit as payment is made against the
documents.
45
Mortgage of Property
Pledge of Stocks
Hypothecation of Stocks
As part of my internship I had to make BBFS and CLP for different applicants that had
applied for an unfunded credit line facility.
46
Clearing
Transfers
Remittances
Cash Transfers
In large branches of Bank Alfalah, all these jobs are done by different departments, but as
Bank Alfalah I-8 Markaz is a small branch, all these jobs are done by one department,
known as operations. Operations department is sometimes also known as the Transact
department.
5.6.1 Clearing
The clearing department is responsible for the clearing of all cheques that the bank
receives daily and the different types of clearing cheques that come in the bank are:
Inward Clearing
Outward Clearing
Online Clearing
The officer affixes the OBC stamp on the cheques and writes its individual
number from the OBC register.
An OBC letter is printed, which shows the cheque numbers, the branch drawn on
and amount.
Original Cheques are attached to these letter and sent to the main Bank Alfalah
branch in that area by courier
48
When that area branch clears the amount from the Non-Bank Alfalah branch, it
sends an Inter Branch Credit Advice (IBCA) to Bank Alfalah I-8 Markaz and the
officer at the branch credits the customer account with that amount
5.6.2 Transfers
Transfers are conducted by Bank Alfalah I-8 Markaz Branch, using its software Bank
Smart. There are two types of transfers:
1. Internal Transfers
2. Online Transfers
5. When supervised, the cheque will be affixed with the official stamps and kept
with the bank.
5.6.3 Remittances
There are two main types of instruments that are used to transfer money, which are as
follows:
50
For Cash
Sundry A/c
Head Office
Inward DDs
This is the procedure adopted when the issuing branch sends copy of the instrument as an
advice. When the bank receives the advice, the officer will pass the following entries:
Head Office A/c
DD Payable A/c
When the customer comes with the DD to get his payment, the following entries are
passed:
DD Payable A/c
Cash
If that customer is a Bank Alfalah account holder then the following entries are passed:
DD Payable A/c
Customer Account
Customer A/c
Citibank A/c
Citibank will then transfer that money to Bank Alfalah Karachi. The entries are:
Citibank A/c
Bank Alfalah Nostro A/c (chi)
Later Bank Alfalah will transfer the Nostro A/c money into the demand account.
Nostro A/c Bank Alfalah
Demand A/c
Now when the customer will come to take his money, the following entries will be made:
Demand A/c
Customer A/c
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7 Conclusion
The economy of the country is booming and with the investment favorable policies and
their smooth implementation, the role of banks in todays economy have become an
important one.
The banking industry is also reaping the fruits of this economic boom by growing rapidly
over the past few years. There are a number of mergers happening in the economy with
foreign investments coming into the banking sector.
It has been ten years since the establishment of Bank Alfalah, and since its establishment
it has aimed to become the leading bank of Pakistan by that provides outstanding services
to its customers.
The bank has seen phenomenal growth in the past few years by opening more branches in
the country, increasing the deposit base, while also increasing the assets and profits of the
bank.
The services that Bank Alfalah provides have a great market penetration not only because
of their features but also the profit and markup rates that they charge. Also the products
that Bank Alfalah provides cater to sector of the economy.
The top management of the bank is always developing strategies that cope with
unexpected challenges to deliver products and services more efficiently
Furthermore, as the bank is growing, the number of employees at Bank Alfalah are
increasing, which shows that Bank Alfalah is being considered as a an employer, that
provides its employees with a challenging environment to work in, where they can
harness their full potential and shows confidence as an employer by the employees of the
bank.
Lastly to become the leading bank of Pakistan, Bank Alfalah has to benchmark its
services to its major competitors in the industry or the market leader in the industry and
provide a continuous mean of improvement in its existing products and services, while
introducing new ones to the industry.
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In the last section, I would like to give some recommendations and is hoped that if they
are implemented will bring benefits to Bank Alfalah.
8 Recommendations
Some of the recommendations that I would recommend to some of the problems
discussed in the above section, that might increase the efficiency of both the operations
and employees of Bank Alfalah are as follows
8.3 Incentives
Incentive schemes should be developed for the employees that can help motivate them,
which might include:
Personal loans and car financing facilities for all ranks of employees.
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9 Appendix
9.1 Web Resources
Wikipedia (www.wikipedia.com)
Citibank (www.citibank.com/pakistan)
9.2 Reports
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